Address: LGAQ Breakfast



15 June 2015

National Convention Centre, Canberra

Can I thank you for the opportunity to be with you fellow Queenslanders for the beginning of the annual ALGA conference. Welcome to Canberra—it is important for local government representatives to be here because you have the opportunity to engage with ministers and various sections of the Government portfolio is of interest to you. For me, this breakfast gives me an opportunity to relive my own experiences of 14 years in local government, although in those days there was no such thing as a convention or a conference of this nature.

Now, I hope that the discussion over the coming days will also relate to some of the key issues that we are addressing in Canberra at the present time. I thought this morning that I would talk specifically about issues that I know are of greater interest to Queensland than they might be in other states because when you listen to me again in another hour or two, I'll be talking about more general things. But I want to mention briefly a little bit about the Budget situation. I know that local government is, and indeed many other groups are, constantly looking to the Federal Government for additional funds. Well, what I have to say to you is that our bucket is bare. We're still dealing with enormous debt issues. The reality is that our debt will continue to go up. We're already paying well over $1 billion every month in interest, even with interest rates the way they are.

Imagine what it would be like if we were back in the old days with a 17 or 20 per cent interest rate. It would simply be a burden that would be unbearable. But what we have done in the Budget is at least reduce the trajectory of the growth in the debt and now can see an end in sight. There are some very substantial imposts on the Budget that are ahead of us—in particular, the introduction of the National Disability Insurance Scheme, which when the previous government left office was beyond the forward estimates, beyond the forward estimates in the Budget process and so did not have to be brought to account. You know, everyone wants the National Disability Insurance Scheme but it's going to be very expensive. It's going to be much more expensive than the levy will be able to deal with. It's in fact going to be a major draw of government Budget.

Well, we've now got to bring that to account because we've moved to the stage now we're further along the period, we are closer to the first day of the NDIS scheme. We also have to deal with other issues such as education and health funding where promises were made that were never funded and now have to be brought to account. So, there are stresses and strains in our Budget situation which we need to deal with and our capacity to do everything we might like is limited. And I guess that's why I'm particularly pleased that we had such a substantial infrastructure Budget—a road and rail building Budget—last year, a second tranche of which is delivered in this Budget.

We recognise that you cannot balance a Budget simply by reducing expenditure. If we build the economy, that essentially builds government revenue as well, and so we need to use this time when there is an abundance and an availability of skilled workers to build national infrastructure that will be a significant boost to the economy in the years ahead. So, that is a key part of our strategy. There's never been a better time for building roads and rail and we want to take advantage of that. We have a $50 billion infrastructure investment program and that's good news for all Australians—and it's a particularly good news story for Queensland. Our record investment will generate growth opportunities across all parts of Queensland—from the great cities of our south east to the drought-affected communities of our west, the mining and tourism and industrial towns in the north and everywhere in between.

Our investment is opening up Australia and helping Queensland industry, including mining and agriculture, to better connect with growing international markets. It's supporting farmers to get through the tough times today and to mitigate the droughts of tomorrow. It's a growth plan for local business and it contains good news for families. It recognises the important contribution of Queensland's local governments and continues to invest in important local infrastructure and delivering economic returns for local communities, both urban and rural. A smoother and more efficient freight network that connects urban and rural communities to ports and markets is crucial to Queensland's economy. It underpins economic growth and jobs for the future and will benefit every community. Because it is the vital artery of Queensland, we're getting on with building the Bruce Highway. Our $6.7 billion commitment, which is $8.5 billion when we add the state contribution, is a 10 year Fix the Bruce campaign. We are improving its productivity, its safety and reliability and ensuring that its more flood-proof and suitable arterial for all users.

Every dollar we invest in upgrading the Bruce is money in the pockets of local businesses and families. Significant projects are underway such as duplicating the highway between Cooroy and Curra, the upgrades on the Sunshine Coast, the Yeppen Floodplain, constructing Townsville and Mackay ring roads, as well as dozens of safety packages targeting crash sites, widening pavements, building new overtaking lanes and in general, providing a highway that will be capable of meeting the needs of Queensland in the years ahead. In Brisbane, work is continuing on upgrading the Gateway Motorway North. The Government's providing almost $1 billion towards realigning, widening and upgrading the Gateway Motorway between Nudgee and Bracken Ridge to improve safety and ease congestion. And as a part of the infrastructure growth package, we've committed up to $1.28 billion to the Toowoomba Second Range Crossing—and a significant next tranche of funding for that project is in this year's Budget. I hope that the successful tenderer will be announced soon so that we can get on with that job.

The new 41 kilometre link will allow heavy vehicles to avoid the Toowoomba town centre and the associated 16 sets of traffic lights and will cut up to 40 minutes travel time for heavy vehicles bound for the Port of Brisbane. This is an absolutely transformational project for Toowoomba which offers a far superior route for freight vehicles than the existing Warrego Range Crossing. It will also provide huge benefits for all of the traffic that passes through Toowoomba on its way to the capital city. This is a project that we estimate will create 1800 jobs in regional Australia and will be pretty well the biggest road project in regional Australia our country's ever seen. We're also supporting the duplication of more sections of the Warrego Highway and building more overtaking lanes to improve travel times and safety between Toowoomba and Miles. The Government is providing $508 million towards the $635 million package to do this work, with $101 million in this year's Budget.

In February this year, works commenced on Stage 1 of the Toowoomba-Oakey project which will duplicate 5.7 kilometres of the Warrego Highway between Charlton and Cotswold, west of Toowoomba. This is the first of 15 projects on the Warrego Highway, Toowoomba to Miles upgrade package. In the far north, the Cape York regional package is delivering a range of road and community infrastructure projects including upgrades and improved all weather access for sections of the main access road to the Cape, the Peninsula Development Road. We are pumping $208 million into a $260 million package, with $48 million provided in 2015–2016. In December last year we approved funding for a package of early works consisting of 11 projects to seal sections of the Peninsula Development Road. Three of these sections—Rocky Creek to Killara, south of the Sudley, and Kalinga to Healy—totalling 34 kilometres—have been completed. We'll also be upgrading and sealing sections of the Outback Way, Australia's longest shortcut, the trans-national transport link across the heart of the nation.

Now our $38 million commitment to the Outback Way will help unlock the opportunities for Indigenous and remote communities, and promote tourism. As well as these significant investments in Queensland, the Government is providing $49.3 million under the National Highway Upgrade Programme for projects on the New England, Cunningham, Flinders, and Landsborough highways. So, the reality is that our entire national network has been included in this program, and you'll see projects on all of these major highways over the years ahead.

Now our transport interests aren't just restricted to roads. The Melbourne to Brisbane inland railway remains a key commitment. This is a complex project, especially for the Queensland sectors, and will take a decade to deliver across three states. I expect to receive the implementation group's report, which will identify the first stage projects, very soon. We have a $300 million commitment for the early stage works of the Melbourne to Brisbane inland railway line. We're committed to build it, and we are hopeful that we will be able to turn the first sods in this, our first term of government.

In tandem with our infrastructure investment program, our $5 billion Asset Recycling Initiative is propelling state and territory governments to invest in new transformational infrastructure projects to meet community demand. The Australian Government remains happy to fund quality transport projects in Queensland under the Asset Recycling Initiative, including public transport. We were ready to support the previous state government's BaT tunnel project, but unfortunately the new government's current position on asset sales will deny the people of Queensland much-needed public infrastructure—something local governments may wish to raise directly with the Queensland Government.

It's interesting to note that the Labor governments in the ACT, South Australia, and Victoria are all engaging in this recycling program. We have already signed up major projects in Sydney, and in the ACT. Victoria's committed to selling the Port of Melbourne, and we're negotiating how their share of this money can be spent, but it's very likely to go on major urban public transport projects. In South Australia we're negotiating as to how their share of the money will be spent. So this is an initiative which encourages governments to recycle their assets to get extra value from mature assets, to enable some of the vital construction projects that are necessary in every capital city, in every country community, which actually have them.

Now our infrastructure commitments are not only for big-ticket items across the state, but they also deliver to every local government area in Queensland. I can assure you that I understand the pressures that you face to fund the demands of your communities. The Coalition Government has delivered on its commitment to double Roads to Recovery funding under the$ 2.1 billion program in 2015–16. This means Queensland councils will have $142.4 million in Roads to Recovery funding next financial year to deliver important infrastructure upgrades for your communities. I want to encourage you to plan and to try and deliver and spend that money in this financial year. As you'd be aware, the economy is slow nationally at the present time, and in many of your communities. So we want this money to be spent now when it can provide the maximum benefit to the local economy. As I mentioned to you previously, there's never been a keener time for tendering if your projects are going to go out to the private sector. So we're particularly anxious that this money doesn't sit in your accounts but just gets on with the task of actually building roads and making sure that we're able to provide the jobs and the benefits of this program as quickly as possible.

The Coalition Government has also tripled the Black Spots Program in 2015–16, and 2016–17, with an extra $100 million committed each year. As a result of the initial investments in Black Spots, more than 40 projects are likely to be funded in Queensland over 2015–16, resulting in safer roads and improved travel times for motorists.

Earlier this year, Queensland received $52 million in funding for 17 bridge projects, when the outcomes of the first round of the Government's new $300 million bridges renewal program were announced. This investment will ensure that more local motorists and freight companies get to their destination safely and without diversion and I'll have more good news about this program in my address later today.

The Coalition Government is also delivering under its expanded Heavy Vehicle Safety and Productivity Program. Truck drivers and other heavy vehicle operators in Queensland will benefit from at least $14 million in new road upgrades under this program and councils will be a vital part of the implementation and rollout of many of these projects, providing jobs for local workers at a time when jobs and job security are more important than ever.

The National Stronger Regions Program is also giving local councils a boost by enabling priority projects to proceed. Seven Queensland projects totalling more than $30 million were approved under the first round of what is a $1 billion fund over five years. All seven made a strong case for the productivity gains and broader community access benefits that the proposed infrastructure program would bring.

I must say that the quality of many of the applications, especially for the Bridges Renewal Program and the National Stronger Regions Fund, was disappointing. Many good projects were under-sold or ruled ineligible, often because questions weren't answered or matching funding was not confirmed—or the project was simply never going to be eligible. Only about 160 of the 402 applications for the National Stronger Regions Fund were ruled both eligible and value for money.

I hope many of you took the opportunity to attend yesterday's information session on grant programs, and you now feel better able to lodge successful applications next time. I remind you that the National Stronger Regions Fund is not a social program. It's designed to help disadvantaged areas overcome disadvantage. Even worthy projects will not be funded unless they meet these criteria. Now I'm going to speak a little bit more about that again later in the day, and some changes that we'll be making to the rules so that hopefully local government will be able to be a stronger participant, but also to get rid of some of the issues that had been identified by councils as problematic in their own applications. But if you need further feedback in relation to your applications, my department is ready to provide it. If you want further advice about how to put these things together I'd encourage you also to talk to your regional development authority. We've asked them to take a particular interest in canvassing for applications in their own areas, and then to support those applicants who may have difficulty with addressing some of the key issues associated with making a successful application. Now I appreciate that like all forms, it asks a lot of questions, but what we are in fact doing is assessing projects on the basis of their economic merit. So if you don't say anything about the economic merit of the project in the application, well you're not answering the fundamental question. And it's very important therefore that those issues be addressed.

The Government is committed to realising the potential of northern Australia and this is great news for all of Queensland and reinforces our investment in state-wide transport networks and identifies why that's so important. A growing northern economy benefits us all through investment, infrastructure, jobs, and services and it's critical to our national prosperity because of its proximity to our international trading partners. Our recent infrastructure audit found that the population of northern Australia is projected to grow more quickly than Australia as a whole, at 1.8 per cent annually compared to 1.6 per cent in the broader population. At this growth rate, northern Australia will be home to around 1.7 million people by 2031, while upper estimates place it around 2.1 million people. Our Northern Australian White Paper will be a major commitment to developing the north. It's not just about talk; it's serious action. As a precursor to the package, the 2015 Budget included a $5 billion northern Australia infrastructure financing facility, where the Government will partner with the private sector and the governments of Western Australia, the Northern Territory, and Queensland, to provide concessional loans for the construction of major projects. Those projects could include airports, seaports, railways, roads, power stations, water, and communications infrastructure—the type of infrastructure needed to open Australia's northern frontier for business. The right mix of infrastructure investment, delivering in the right place and at the right time, will be critical to providing a strong future for Queensland and for northern Australia.

There'll be a strong emphasis on roads and transport networks in the package. The amount of money allocated for this package is in the contingency reserve, so it wasn't specifically identified on Budget Night, but it is a very big number. This is a serious initiative to develop the North but we can't do it all by ourselves; we'll need the support of local governments and local communities, but also investment from major suppliers of capital, those who are proponents of projects from around the world. There is international interest; we want to tap that, and this program is all about that.

In early May, during Beef Week in Rockhampton, the Prime Minister and I announced $100 million as an investment to improve the roads that are critical to northern Australia's cattle industry. With the Northern Australia Beef Roads Fund we'll help underpin the future viability of the cattle industry as well as benefit other road users, boosting regional communities and improving the profitability of a range of businesses. These are all examples of some of the things that are included in the Northern Paper. The plan will be managed by my department, which will work with the three northern jurisdictions, local governments, and transport and industry experts to make sure we get the best value for money.

The Beef Roads Fund will draw on CSIRO modelling of the capital supply chain to identify the road improvements that will make the biggest financial impact. This initiative will commence next month, run until June 2019 and is in sharp contrast to the style of the previous government which seemed more intent on bringing Australia's beef export industry to its knees rather than enabling its growth. The White Paper on northern development will bring the threads for a future Northern Australia policy together. It'll focus on building and upgrading roads, developing water resources, attracting more investment and reducing red tape. It will outline a plan, not just for the immediate future but for decades to come. And we're committed to releasing this white paper on developing Northern Australia by the end of June 2015—I can tell you it's only days away.

As we know, Queensland has had more than its fair share of natural disasters. From 2010 until 2013, the Commonwealth has provided $10.3 billion to Queensland for disaster reconstruction and recovery. That's over 90 per cent of all the money the Commonwealth has provided to disaster relief. It's the hard work of communities and local councils that has brought us to the stage where recovery work from the 15 events between 2010 and 2013 is almost complete. Local Government also has a large role to play in managing the events and impacts of natural disasters in the future. The Productivity Commission inquiry identified the significant and enduring influence of land use planning decisions on the vulnerability of people and assets to natural disaster. Land use planning is an area where local governments can significantly reduce the impacts of natural disasters. I want to emphasise that the Commonwealth accepts that it will always have a role in responding to natural disasters and we're always looking for ways to make the lives of those caught in disasters better.

As you are all very much aware, soon after coming in to government at the request of the state and territory governments, we commissioned an inquiry into disaster funding arrangements. Early last month we tabled the Productivity Commission inquiry and the ANAO reports into national funding arrangements. Both reports are critical of the current funding system and make it clear that change is needed. They advocate greater expenditure on disaster preparation and mitigation to reduce the funding required for disaster repair and recovery. The Government is not proposing to implement the severe cuts to recovery funding recommended by the Productivity Commission. Instead, we will seek to pursue a more modest and gradual approach to getting the balance of mitigation and recovery funding right, in close consultation with state and territory governments. As a start, we're looking at a shift to upfront funding models rather than reimbursement, a change that will give greater autonomy to state and local governments in managing events.

The only long term solution to a range of existing restrictions, including to day labour, is to move to the upfront recovery model proposed by the Australian Government. Under this model, state and local governments would have a greater level of flexibility to spend recovery funding in the manner most suitable to their local needs. Importantly the existing restrictions related to the reimbursement of council day labour costs would no longer apply and I'm pleased to advise today that the Australian Government has formally written to the Queensland Government proposing an interim solution to the use of day labour. Subject to the state's acceptance of a number of oversight and assurance conditions to make sure taxpayer's funds are not being used to subsidise just the ordinary operations of councils, councils will be able to apply to use their own labour for reconstruction works when it can be demonstrated that this will provide better value than contract labour. We are pleased that we have been able to find a way forward on this issue which we know is a significant one for Queensland Local Government and we look forward to the Queensland Government's favourable response.

Thank you for the opportunity again to be part of your breakfast. I am passionate about the need to build the infrastructure needed for a better Queensland and a better Australia. It's been an honour and a privilege to be Infrastructure Minister during this era. The Coalition Government's vision is jobs, growth and opportunity and it will deliver a secure future for the state that means so much more for everyone in the room.

Local governments across Queensland are a partner in that vision and just before I close can I give a special mention to the Townsville City Council and their Lifecycle Cost Asset Management Plan which has been highly commended by the judges in this year's National Awards for Local Government. The project is a tool for council to better understand the whole of lifecycle costs of their assets, that in turn will drive better value for money for their ratepayers and I think this is the kind of innovative thinking that embodies local government. Can I encourage you all to be participants in the Local Government Award's program—there are a lot of innovative things happening with Queensland's local governments which you need to tell the world about. The hard work that you do in day-to-day management of your communities is greatly appreciated, your personal commitments as councillors is also gratefully acknowledged and I wish you all well in the next round of local government elections.